Treat Your Business

117 The Numbers Game: What Every Clinic Owner Should Know

• Katie Bell / Nichola Page • Season 1 • Episode 117

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Welcome, my lovely listeners!
If you’re feeling a bit like an ostrich burying your head in the sand when it comes to your clinic’s numbers, then this episode is for you. Whether you’re running a busy clinic with a full team or working solo and thinking, “I don’t really need to track my numbers,” I promise you, you do.

I’m joined by my brilliant COO at Thrive, Nichola, who is an absolute numbers queen. Together, we’re breaking down why understanding your revenue, profit, and occupancy is non-negotiable for your business success. And yes, we’re making it fun, because who doesn’t love a desert island game with some financial wisdom thrown in?

Episode Summary

In this episode, Nichola and I discuss the three key metrics every clinic owner must track to grow and scale effectively. We talk about why knowing your revenue, profit, and occupancy levels isn’t just for accountants, it’s for you, the business owner, to make better decisions, stop wasting money, and ultimately, create a business that serves you.

If you’ve ever thought, “I just need more clients” or “I should throw more money into marketing,” stop right there! Before you do anything, you need to know if your business model is even set up to support your income goals. We cover how to reverse-engineer your pricing, what to do when you’re not hitting targets, and how to make your business work for you, rather than the other way around.

Key Takeaways

  • The three key numbers every clinic owner should be tracking: revenue, profit (or owner's take-home pay), and occupancy/capacity.
  • Why focusing on conversion rates before pouring more money into marketing can save you thousands.
  • How to spot a leaky bucket in your business - clients coming in but not staying.
  • The power of reverse-engineering your pricing to make sure your business model actually supports your income goals.
  • Why checking your finances at the end of the tax year is too late - and what to do instead.
  • A simple method to track your income and expenses every month so you’re in control, not guessing.
  • Why understanding your occupancy rate can help you plan for holidays without losing income.

If you’ve been putting off looking at your clinic’s numbers, take this episode

Treat Your Business podcast is proudly sponsored by MBST, the groundbreaking technology revolutionising recovery and rehabilitation. Offering a non-invasive, drug-free solution for musculoskeletal conditions and nerve injuries, MBST works at a cellular level to stimulate regeneration. Expand your services and deliver long-term patient improvements without increasing your workload.

Learn more at mbstmedical.co.uk. 

Katie Bell: [00:00:00] If you are feeling a little bit like an ostrich that buries their head in the sand when it comes to knowing your numbers in your clinic, whether that is you are a clinic owner with lots of team with lots of services, and you're not absolutely clear on your team's performance, everybody in your business hasn't got a measurable and you feel a little bit in the dark about how you're going to actually achieve your target of revenue and profit for this year, or whether you are a. clinic and that just works by yourself and you don't actually think you need to know any of your numbers because it's only you you're all going to get something from this episode. Nichola, my COO in thrive is here to talk numbers. She loves the numbers and everything we do. In my clinic and in Thrive has to come from a numbers perspective.

Yes, we want to lead with our hearts. Yes, we want to go with our gut instinct, but we also have to see what are the numbers telling us because that allows us to direct our actions in the right way. So you [00:01:00] can feel less confused. You can feel more clear. You can be more strategic. You can have more time and stop doing all the things that are not actually making a difference to your bottom line.

So without further ado, let's get Nicola on and let's hear all about Why knowing your numbers is so crucial to your clinic's success.

Welcome to the Treat Your Business podcast with Katie Bell. I am Katie and this is the place to learn the strategies, tactics, tools, and mindset needed to build your clinic or studio into a business that gives you the time, money, energy, and fulfillment you want and deserve. My team and I work every day with overwhelming excitement.

like you to shift them from a business that is a huge time and energy drain and is not giving them the income they want, to confident clinic owners that are making money, saving money and getting time back in their lives. So if this sounds like something you want, let's dive in.

​

Katie Bell: Hello, my lovely listeners. Welcome to the Treat Your Business podcast. If you are new to listening, a huge welcome. I am delighted to be [00:02:00] joined by Nicola, who is our COO in Thrive. Nicola, welcome back to the podcast. 

Nichola Page: Thank you for having me again. 

Katie Bell: You are so welcome. Now, I thought, Nicola, we would play a little game

the game that we are gonna play is. You know when we're on a long drive and you say to whoever you're in the car with, if you were on a desert island and you could only take three things with you, what would those three things be? Okay, now I thought we, that if you and me were on a desert island having a lovely time and we just needed three key metrics.

three key numbers that would tell us the information that we really needed to know about our clinic or our business or about Thrive. What would those numbers be? Because I think so many clinic owners get overwhelmed with the [00:03:00] amount of things they think they should be tracking. And ultimately most of those numbers deliver into one bigger number.

So I've totally put you on the spot here, Nicola, but if we were on a desert island together and we had three key numbers, three key metrics delivered to us on a rowing boat, on a piece of paper, what would you say they need to be for our clinic owners? 

Nichola Page: Okay, the first one is revenue. So your sales revenue, that's an absolute must.

The second one would be profit. Now profit, you might interpret that as the money that you get to pay yourself. So it might profit or owners take home pay, one of those two. And the third one with a clinic would be your occupancy or capacity. So basically that means if you've got therapists in your business, they will have a certain amount of time in their diary and you would want to [00:04:00] see that they are achieving their occupancy or capacity target.

Those would be the three. So if you had a studio then, or maybe you've got a studio attached to your clinic, Then you would also want a metric that is looking at or a number that is looking at the number of recurring members that you have. Those will be the numbers. So I'd still have revenue, I'd still have profit or owner's pay, but now I'd be looking at number of recurring memberships.

Those will be my three. 

Katie Bell: Yeah, I love this. So the third one that you said for either studio owners or clinic owners, so recurring revenue or memberships and occupancy, I guess then underneath occupancy, we would want to know conversion rates from new patient to follow up. We want to know how many follow up treatments they're doing.

Those are their retention rate, but ultimately if those are. are doing what they need to do, your [00:05:00] occupancy will, and your marketing, so a number of inquiries are coming through, that will all drop into the occupancy that you have set your revenue target off. 

Nichola Page: Correct. So If you had an occupancy target of that you wanted, for example, all of your therapists to be at 85 percent of their available hours in any given week.

If you saw that the number that you will be being given was 70%, 75 percent or less, whatever the number is, that allows you then to say we're off track. Because the target is 85%, and now you look at that particular number to establish why. That's when you can go, okay, is it because we've not getting enough new patients booked in?

So that might be another metric underneath that, that you dig into. And if that was off track, now you know your marketing isn't doing what it needs to do to bring new patients in. If [00:06:00] that was on track, but then your new patient to a follow up conversion was not good, now you have a potentially a therapist issue in terms of they're seeing new patients because the metric was on track, but when those patients coming in, they're not getting booked into follow ups.

So now you're able to really zone in to look at What part of the business is causing the key number to go off track or not? That's the beauty of having these numbers. It is a numbers game, it's a great numbers game, but it takes all the guesswork out because you can really just delve into the part of your business that needs improving, fixing, or whether you've got a people problem.

Yeah. 

Katie Bell: I love this. And if you've got, then, so if you, once you've delved into these areas and let's say we're on our beach what drink would you have ordered, Nic? 

Nichola Page: I think I would go for a pina colada, I think. I'm feeling like a [00:07:00] pina colada day today. 

Katie Bell: Nice. Okay. Yeah, I like that. I like that. So you've got your Pina Colada.

The rowing boats have just arrived. It's given us our three metrics and we now need to dig into this a little bit further, right? So we're now looking at our conversion rate, retention rate. We're looking at inquiry conversion. So we then realise that our client care team are not actually getting the inquiries over the line and getting them booked in.

We also realize that not only that, but we're down on our new patient leads. So we've got a marketing issue. And then we go, my God, this therapist is not converting. They've got, they've had 10 new patients and only three of them have rebooked. And then we realize that not only that they've rebooked, but they've only seen 'em again once.

So now I met with all of these figures, great, but now I don't where to start. What do I do first? So when you met with a lot of metrics, Nic, that may tell you a big story and there's lots of things that you potentially need to deal with, where would you start with this? 

Nichola Page: I'd want to make sure that if we come [00:08:00] back a stage, because we mentioned about the revenue or the sales revenue target, first of all, so your clinic needs to be making money, your business needs to be making money.

So I just want to make sure that I had calculated correctly that if my team, if the therapist or the service delivery team were at their 85 percent occupancy, The revenue that generates, does that give me what I want, first and foremost, because that's the crucial bit, because if you're, the number of team and the hours that they're going to fulfill and the diaries that they're going to fill up does not give you the revenue target, that's what you need to look at first, because you're going to hit a ceiling with that.

So as long as that part gives you a projected sales revenue that you like the look of, and that you've seen that once all your costs have gone out, you like the profit number or the amount that you can pay yourself, great. Then your model, in principle, [00:09:00] will work. So then if, so we're going to assume that's the case, that you've done all of that and all those numbers look great.

And then you're going to look at, okay, so now if the, Occupancy is down. The first thing I would want to look at would be the conversion rate. So a new patient to a follow up. Because if you are investing money, let's say you're investing money in Google Ads or whatever other marketing that you're doing, there is a cost and not just money, but time involved in that.

So if you are spending money to bring new patients in, but you've got team who are not converting, you're just wasting money. So that is the first gap, leaky part of your bucket that I would want to fill, first and foremost. So then let's, that might be team training, whatever it is that you need to do to improve the conversion.

So that, that's the biggest thing I would say that you would need to fix, first of all. 

Katie Bell: And often what we [00:10:00] see, Nic, is that they do it the other way around. Is that they'll think, Oh, I just need to do more marketing. I need to pull more money, put more money into my Google ads. I need to do things there with my marketing, which may well generate more leads.

But if we're not then fulfilling those in the right way, then we're literally just burning through cash at a phenomenal pace. 

Nichola Page: Completely. So it's. lIke you said, most people start that way. We always recommend that you take a look at internally first, fix what's going on inside the business before you start doing any more marketing because you're, you are, you might as well just open the door and throw your money out the door.

Katie Bell: Buy some more pina coladas. 

Nichola Page: Buy me some more pina coladas. I might have a glass of champagne there, though, please, if that's alright. .

Katie Bell: Okay, so Nic. When we've got a better insight in our numbers, when we are not burying our head in the sand and ignoring some of these key metrics, whether you are a clinic owner that is just [00:11:00] you're just a sole trader, not just, you're a sole trader, it's just you in the business, you're seeing clients, you're the lead, the key generator of revenue into your company, or whether you are running a big team of clinicians, the numbers are relevant.

at every level. But as you grow and as you have a more complex business or you've got more things happening, you'll just need more numbers to be able to measure those activities from. So what would be your advice, Nic, if you've got somebody listening to this who is On their own, they work for themselves and they don't really track any of their numbers.

They wait for their profit and loss to be delivered from their accountant three months after their year end that tells them whether or not they made any money last year. What would you be recommending to those people that they look at first of all? 

Nichola Page: You can start straight away by looking at your new patient to follow up conversion, because that should be pretty straightforward for you to track.

And if they're, if you're not converting as well as you might [00:12:00] think you are, then you can work on how do you improve that process. I would really strongly encourage you to look at your financial numbers though. It is not good enough. It's not good business sense to wait till a year has gone before you look at any of your financial numbers.

So if it was just you and your business, I would want to be tracking your revenue.

So the money coming in on a monthly basis, looking at it at the end of a tax year, or three months after a tax year is just not gonna work because there is nothing you can do about it after that length of time. Whereas if you look at the money coming in and you measure it. Yes. Okay. It's still at the end of the month, but you've got more time to now make a bigger impact for the next month ahead.

So that's one thing I would definitely encourage you to do. You can certainly start tracking immediately your new patient. to follow up conversion. That should be really easy for you to do. So do [00:13:00] that now. Two days, start doing it. And then, so with the coming back to the money coming in, the revenue, just get yourself into a flow of, let's say by the third or the fourth day of each month.

You go in and you just log all the money that's coming for the month before and then you keep that momentum going so block it out in your diary some time to do it but also not just the money coming in look at your money going out now not everybody likes to look in their bank account and see how much money they have no longer got but this is really important for you to do because Sometimes you can see that there's a cost going out of your business that you actually don't need anymore.

You've forgotten about it. So it's a time to be strict with what am I paying for that is actually not really needed. Nobody would know if this was no longer a cost associated to the business and just start to [00:14:00] streamline what your costs are. And again, do that on a monthly basis. You don't have to go back for a whole year.

Just start. Just start so we, as we are recording this, we're coming up to month end. So I would put a date in your diary. So whatever time you're listening to this, get a date in your diary for the start of the month and just do it for the previous month and then keep in that flow. That will set you in good stead for making sure you can see.

where you need to make some improvements. So that's where I would start.

Katie Bell: And because it's just starting somewhere, very simple, one brick at a time builds the wall. We don't go for the wall, straight away. I had a great conversation with one of our members on our Q and A this week. And she said, when I look at my profit, I'm not making as much as I projected that I wanted to.

And I just work on my own. I don't want any team. And then she said, so what do I do about that? And I said you've got one of four things. [00:15:00] You've got to get more clients through the door. You've got to get those clients spending more money with you. You've got to reduce your costs. And I can't even remember what my fourth piece of advice was now.

But I said to her, where is the challenge here? Because I said, let's have the first thing I asked her to do was go and look at her occupancy for the last three months. Because this client, although the perception is that they're very busy, they might well be. Okay, great. But what that will help us see is if often we've got gaps flitting in and out of diaries all the time.

And so we think we've been fully occupied. But when we actually look at it, we're sat at 65, 70, 75%. Therefore, we have a an opportunity. We need more clients. to come through the door, or we need to look at our conversion rate and retention rate to have more sessions in the week. But what that also allows them to do, Nic, then, am I right, is that I was asking this client to do this because I said the pricing that you have [00:16:00] might not be able to create the profit levels that you want and the revenue that you want.

The model that you have as a clinic owner on your own, it's alright plucking a figure out of your bum saying, oh, I want to make 8k a month and take home 6 of it but is the model that you're currently working at, the number of hours that you've got available and the cost that you currently price, that you currently charge, going to be able to do that for you?

Yeah. And if the answer's no, then we either need to increase your prices or we need to change the business model. And that was the bottom line of it. So that's why that's occupancy and tracking that helps you see if this business model is set up to serve you in the way that you want it to. 

Nichola Page: Yeah, completely.

No, that's crucial because like you say, if you had a target if you only want to see X number of patients in a week. And it's up to, entirely up to you how many patients you want to see a week, but then you have to do the maths on that. So if that's how many patients you want to see in a week, [00:17:00] times that number by how much the average session value is, that's what your maximum amount of revenue is coming in.

And then you, once you take off the costs from that, if you don't like what on the bottom, The amount you're going to be able to pay yourself. And remember you've got to pay tax as well. So you need to move some money aside for the tax. Cause a lot of people forget about that part. They just look at the money that's in the bank.

And especially we have a sole trader and think, okay, that's mine. Don't forget. You need to push some money, keep it to one side for your tax. So you don't get to year end when your tax bill comes in and you're like, Holy crap, where do I get this money from? And that's when we start doing discounted, crazy offers.

Just to bring the money in to pay the tax. If you don't look at those numbers now, and all you are doing is just trying to get more people in to keep that diary that you think you need to fill, filled, you might be very [00:18:00] unhappy when you get to the end of the year thinking actually I've not made as much money as I thought I would.

because the amount of patience that you could see was not going to give you what you want. So we always advise people to reverse engineer. Start with what is it you want to be able to pay yourself. So let's say it was 4, 000 a month. What are your costs on top of that? That gives you the target amount of revenue that you need to be bringing in.

Okay. So the amount you pay, you want to pay yourself plus your costs to deliver and everything else that goes with the business that you are running. That equals the amount of. money you need to be bringing in the top. Divide that by the amount of patients that you want to see in a month. That gives you what your patient session value should be.

That gives you what you should be charging. Now if there's a mismatch between all of that's where you've got to start there. Otherwise, no amount of marketing or getting better at converting is going to fix it because you're capped. [00:19:00] with it. Does that make sense? 

Katie Bell: It makes 

so much sense.

And yeah, it's so powerful because that is what we call the profit first model. Whereas most clinic owners would go, let's just have a look at all the money that I made in February. And they do that sometime. It'd be great if they did it in March, but most of them would do it a few months later.

Cause that's the reality of what we're seeing in the industry. We're not on top of our numbers. So let's say they look at the revenue. They're then just deduct all of the costs.

I've got no money left at the end of the month. And then like you say, we're in reactive mode that we then think we need to double down, work harder, et cetera. And a part of this then means that we feel like we can't go on holiday because when we go on holiday, the business doesn't make any revenue.

But you can project for that. You can project in that you can have six, eight weeks off. We just need to know then what we need to make on the other weeks to allow yourself to have holiday. 

Nichola Page: Exactly. You build your business around you, build your business around what you want and how you want [00:20:00] to spend your life, how many holidays you want, all of that stuff.

If you want more time with the kids, if you don't, not everybody wants, you may find this hard to believe, everybody wants to work five, six, seven days a week. So start with the intention of what you want it to look like to then determine really what we're saying here is really what you should be charging.

And then that might put you into a bit of a tailspin. It might be a bit of a way off from what you're currently charging. But that's the reality. Unless you were then charging those fees, if you don't want to increase your hours, what's your alternative? But that just might be a mindset shift.

We all, we always see people in the industry that we work with really undervalue their services. So these numbers give you clarity. And that's what business is about. Once you are clear, once you have that, the handle on the numbers, then you can move forward with [00:21:00] whichever strategy is, 

Katie Bell: Yeah, it's, these are the founder, the fundamentals in business.

And they're often the things that get overlooked because they're difficult. We don't know how to do it. And we are here to say, Nic, it doesn't have to be that way. And once you get clarity, once you get the support, once you're taught how exactly what you need to be looking at, when you need to be looking at it and how you manage your money, you can then sleep better.

You can feel more relieved. You can stop being so reactive, feel like you're juggling a million plates and not doing a great job of any of them. Because we've got clarity on what we need to be doing, when we need to be doing it. 

Nichola Page: You've just got to know your numbers, Katie. 

Katie Bell: Nicola, know your numbers. You've just got to know your numbers.

You have. You have. That is your takeaway, everybody. Just know your numbers. Love, Nicola. P. S. I'd like a pina colada, pronto. A glass of champagne. And a side glass of champagne, absolutely. Everybody, thank you for listening to this episode. I hope that you are, have been just a little bit more inspired to get some clarity on even just [00:22:00] one number from today's episode.

Thank you for listening.

 

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